Objective
- Identify tax and nontax advantages and disadvantages of LLCs and partnerships
- Describe how inside and outside basis is affected by liabilities, recourse and nonrecourse
- Discuss the impact of cash and property distributions
- Explain the tax consequences of a sale of an interest and distinguish such consequences from the tax consequences when a partnership or LLC is acquired or merges into another LLC or partnership
- Complete a case study to improve advocacy skills before the IRS
Highlights
- Applicable provisions of the One Big Beautiful Bill Act (OBBBA)
- Single-member limited liability companies as an alternative to subsidiaries
- Cancellation of indebtedness rules and regulations
- How the IRS views members or partners for Social Security purposes
- Special problems when forming an LLC
- Debt issues and problems in structuring LLCs and LLPs, including loan guarantee issues, recourse and nonrecourse debt, the at-risk basis rules, and new regulations restricting bottom-dollar guarantees
- Distribution or a disguised sale? New regulations eliminate certain tax-deferred leveraged partnership transactions
- Death or retirement of a member or partner – understanding the alternatives
- Step-up in basis issues – how to make the computations and elections
- Property transactions between the LLC/LLP and its members or partners – what to do with built-in gain or loss property
- When are partnership losses deductible?
- Material participation rules for LLC members and limited partners and how they affect passive loss issues
- Continuation and termination of an LLC/partnership in the context of a merger or acquisition
- Sales of an LLC interest – holding period and hot asset issues
- Impact of the tax on investment income on the sale of an interest in a partnership or LLC
- Repeal of the technical termination of partnership provision
- Impact of Soroban Capital Partners LP, 161 TC No.12
- NEW: The IRS removes recently finalized regulations identifying certain partnership basis shifting transactions as transactions of interest (see Chapter 2)
Designed For
CPAs with clients using the LLC or LLP structure who need to understand advanced issues, problems, and planning strategiesPrerequisite
A basic course in LLCs/partnerships or equivalent knowledge and experienceAdvanced Preparation
None